The US government's method for determining reciprocal tariff rates has been criticized by economists as a calculated gimmick. The Washington Post reported on Friday (April 4) that the final version of these tariffs was personally selected by President Donald Trump, just three hours before their public announcement.
According to the report, economic officials began calculating tariff rates imposed by various countries on American goods after taking office and drafted a list for reciprocal tariffs. Trump personally chose a formula that relied on just two simple data points: the trade deficit the US has with a specific trading partner divided by that partner's exports to the US This ratio then determined the tariff rate, which was halved to establish the "preferential" reciprocal tariff rate, set at a minimum of 10%.
While the White House did not disclose who proposed this plan, the formula resembles a calculation method put forward by former economic advisor Peter Navarro during Trump's first term. The report underscores Trump's determination to initiate a trade war, highlighting his disregard for the constraints of the presidential office and his inclination to surround himself with a cabinet that supports his views.
Sources revealed that business leaders rushed to meet with government officials at the last minute, hoping to negotiate lower tariff rates. Following the announcement of the reciprocal tariffs, senior executives in the US business community expressed shock at what they deemed an absurd calculation method. A representative from the retail industry remarked that the tariff rate imposed on a specific trading partner was double the highest rate predicted by one company in the industry.
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